Dust consolidation \ stacker news ~bitcoin

2780 sats \ 21 comments \ @joda 31 Jan bitcoin

zaps forwarded to @anita (100%)

Have there been proposals to change to code to allow dust consolidation by some mechanism?

The threshold for dust will be going up as the fees inevitably go up, which disproportionately affects people with lower value UTXOs ("poor" people), and encourages consolidation of UTXOs (bad for security and privacy).

To consolidate dust would increase the spendable circulation, effectively devaluing it, so miners are not incentivized to do this.

But I'm wondering what considerations have been made about this.

Just a thought experiment, as without some sort of social mechanism, this would require code changes.

What about a separate mining block only for dust consolidation? Like there could be a separate mempool for dust TXs. Every transaction must include only UTXOs under a certain amount. This block would have minimum fees, so it would be done as a "social service". Maybe one block every 100 would operate this way.

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61 sats \ 1 reply \ @OriginalSize 31 Jan

If you have dust, technically outputs which are not economical to spend, then you may want to subscribe to some sort of fee market alert. I can't see anyone going along with a code change since one man's dust is another's spam.

0 sats \ 0 replies \ @Turnspit_Dog 31 Jan

https://txfees.watch

73 sats \ 1 reply \ @cyberpunk0101 31 Jan

Cool idea I like the 100 Block call.. You would need this as a minimum to potentially stop Dust Attacks.

Or Even some type of Submarine Swap into Lightning as the people requesting the "social service" may be better off using Lightning if/when Dust is unspendable.

But again Shows importance of forward thinking UTXO management.

0 sats \ 0 replies \ @joda OP 31 Jan

Dust Attacks

I think dusk attacks would be prevented by requiring the transaction to consolidate to a single UTXO. So you must have 1) At least three UTXOs with 2) Each having a maximum of X sats (dust threshold), and 3) All consolidate to a single address.

10 sats \ 3 replies \ @TheBTCManual 31 Jan

I guess that could be an option, could be an "i care for the community, ill burn some profits" signal by a miner, might be good for PR, but what would be the point of wanting to spend these?

I guess people could send a bunch of dust transactions at 1sat per vbyte and when the mempool is filled with them but where would they go? Maybe if its in conjunction with lets say a multi-sig address, lets say you sending it all to a fedimint address or pegged into liquid then it makes sense since you could still unlock that spendable value

I wonder if these dust transactions could be resolved with a convenant or if the UTXOs themselves could be sold via a statechain instead since you're not moving the UTXO but the keys and people could buy up a bunch of these to consolidate

0 sats \ 2 replies \ @joda OP 31 Jan

The point is that they can't consolidate. No matter who owns the UTXO, the cost of adding it to any transaction exceeds the value it holds. Say you have a UTXO with 10 sats, and the marginal fee per UTXO is 20 sats (every UTXO you add to the transaction is adding some vbyte).

So you could transfer ownership of the UTXO, but even someone with a million 10 sat UTXOs couldn't do anything with them.

Or do you mean they are only consolidated on the sidechain? I guess that's possible. It would be known that they are essentially irredeemable, but maybe it wouldn't matter and they could be used as a kind of token on the side chain.

10 sats \ 1 reply \ @TheBTCManual 31 Jan

I understand the first point I was just riffing on your idea of a "charity" block, it would really only make sense for miners to waste their resources moving these UTXOs if they could be moved to a second layer/sidechain otherwise you sit with the same issue again

But in the case you mentioned above, certain thresholds like 10 sats, fuckit man just burn the keys forget about it

0 sats \ 0 replies \ @joda OP 31 Jan

yeah but imagine if/when BTC gets really popular-- If you think we're "early", then it seems inevitable.

I was just making up a number, but Sat/vB has been in the hundreds and can presumably get up to tens of thousands if the demand is high enough. So imagine you have UTXOs with thousands of sats each-- they can become dust wallets. And if you think BTC could 10x from here, you're probably going to want those sats...

But yeah, it's just a daydream...

10 sats \ 2 replies \ @chungkingexpress 31 Jan

A charitable miner could always opt to include 0 fee transactions out of band perhaps?

0 sats \ 1 reply \ @joda OP 31 Jan

I think the mining software would have to give an option to "also pick some fee-free dust consolidation transactions" to the miner, rather than always choosing to make the most profitable block. But mining is not a charity, and you can't mandate anyone to do this.

0 sats \ 0 replies \ @chungkingexpress 31 Jan

I wonder how much dust is out there already.

10 sats \ 2 replies \ @OT 31 Jan

For smaller amounts you're going to have to use bitcoin in the upper layers

0 sats \ 1 reply \ @joda OP 31 Jan

you can't because the cost to do anything with the UTXO, even put it in a lightning channel, is more than its value. The extra bytes will increase the mining fee by more that it is worth.

10 sats \ 0 replies \ @OT 31 Jan

Start with custodial LN

Build it up to 1m sats then either open a channel on non custodial LN wallet or send into cold storage.

21 sats \ 0 replies \ @031ca302ff 31 Jan

The threshold for dust will be going up as the fees inevitably go up

No. Dust is not a function of tx fees. It’s a relay policy

To consolidate dust would increase the spendable circulation

What? No UTXO can increase circulation

…miners are not incentivized to do this… separate mining block only for dust consolidation

So miners are not incentivized to act against their own interest, but maybe they will?

Even with empty blocks, no one was consolidating dust. And how do you expect miner to include txs they don’t have the keys/scripts to spend. If you want to get rid of dust in your wallet, you’re better off donating it to the miners as a OP_RETURN.

0 sats \ 2 replies \ @joda OP 31 Jan

An alternative to this proposal would be for a small percentage of each block reward (or fees) to go into a pool that pays out the dust consolidation block, so miners are still paid something for this service.

31 sats \ 1 reply \ @CruncherDefi 31 Jan

How would you differentiate between 'genuine dust from legitimate users' and 'dust generated by tech-savvy users just for extraction of the dust-consolidation funds' ?

You cannot. Whatever metrics/heuristics you come up with for eligibility in the limit can be replicated by tech-savyy users.

0 sats \ 0 replies \ @joda OP 31 Jan

I don't understand what you mean. How can a "tech savvy" user "generate" dust without paying fees? The balance of every UTXO is already known, so someone can't (would be restricted from) use a UTXO above a dust threshold. That transaction would never be included in the special dist consolidation block, only regular blocks, and would therefore pay standard fees.

31 sats \ 2 replies \ @Anonymous_Hodler 31 Jan

Interesting idea… I am sure in the future, plenty of « bitcoin » services will appear, and that could be one…!

31 sats \ 1 reply \ @cyberpunk0101 31 Jan

A Burn Mechanism to pool some sats for the Dust UTXO consolidation.

0 sats \ 0 replies \ @cyberpunk02 1 Feb